Fayetteville budget guidance to staff remains murky
It was supposed to be a budget work session to give Fayetteville financial staff guidance on the FY 2015 budget expected to receive a vote on July 17. But in the end, the July 10 work session of the Fayetteville City Council provided no direction. Two on the council spoke against a proposed millage rate increase while two were in favor of the measure, but there was no consensus on how to continue. That left finance staff with no indication how they might adjust the budget in a way that would pass muster.
Council members at the called meeting set out to review the proposed $10.4 million general fund budget. The proposed FY 2015 budget shows $10.4 million in revenues, with $171,469 of that amount coming from a proposed .25-mill increase.
The overall assumptions for the budget include adding 11 new council-requested positions, including four police officers and three firefighters, along with maintaining appropriate levels of both restricted and unassigned fund balance, increasing employees salary rates by 2.4 percent and funding the Ga. Highway 92/Hood Avenue project additional cost from the unassigned fund balance. The council is also considering increasing building permit fees and increasing the water and sewer rate by 2.4 percent to reflect the Consumer Price Index.
Also in play is a proposed .5-mill increase in the Capital Improvement Program (CIP) fund with a proposed budget totaling $1.698 million, of which $923,720 is generated from local taxes. Of that amount, $342,938 would come in the form of a .5-mill tax increase. Nearly $540,000 would go for police cars, equipment and other law enforcement operations and support services. The remainder would see $200,000 to resurface North Jeff Davis Drive, $60,000 to replace to fire department vehicles, $70,000 for buildings and inspections, $30,000 to replace a truck at public works and $25,000 to paint the interior at City Hall.
The increases in the general fund and CIP millage rates would cost the average homeowner approximately $60 in higher taxes on a $200,000 home.
The consensus, or more to the point the lack of it, amounted to a split among council members on which way to proceed. Councilman Ed Johnson was in favor of the staff proposal and Councilman Scott Stacy said he would support it because city staff and public safety benefitted. Mayor Greg Clifton was in favor of the proposal though the mayor can vote only to break a tie once the matter comes up for that vote on July 17.
Councilman Mickey Edwards was unable to attend the meeting.
Councilmen Paul Oddo and Jim Williams were opposed to the recommended budget, with both citing the need to reduce expenditures in other budget areas to offset the need to increase the millage rate.
Oddo said the 2.4 percent pay increase to city staff could be removed from the budget and, if conditions warranted, the council could reassess the idea of phasing in increases during the year.
Williams in his objection cited the potential for a national or international economic crisis that could affect Fayetteville. Noting that he is not in favor of tax increases, Williams said the $20 million in all combined funds should be trimmed to eliminate the proposed general fund and CIP increases that total more than $500,000.
Finance co-directors Ellen Walls and Lynn Robinson maintained that nearly all the money in the city’s 12 funds totaling $20.8 million are restricted and could not be used to cut the more than $500,000 Williams referenced.
Walls told council members that the cuts Williams referenced to offset increasing the millage could be made to the general fund or by using a portion of the unassigned funds. Walls and Robinson, as they had previously in the meeting, asked for direction from the council.
The 12 funds totaling $20.8 million, which are largely restricted, include water and sewer, impact fees, capital projects, one-percent sales tax, hotel/motel, solid waste, confiscated assets, the Downtown Development Authority and Main Street Tourism, vehicle excise tax and the cemetery fund. Walls said restricted funds, such as water and sewer and solid waste, were already lacking and required the fee increase being proposed. The only other fund which could be used for general fund purposes is CIP, which also has needs and is not self-sufficient.
Walls and Robinson again asked for direction, noting that they had been told to include the 11 new staff positions.
Williams after one of Robinson’s comments reiterated the need to cut the $500,000 from across all funds, noting that the inability to make those adjustments was more akin to the approach used by federal employees.
Walls said the unassigned fund balance for FY 2015 projected at $2.4 million could be used but staff had been told not to use those funds.
Similarly, Robinson noted that though staff provided a balance budget at the retreat in March that included the 2.4 percent staff increase, they were later given direction to add the 11 new staff positions.
City Manager Joe Morton also reminded council members that including the 11 staff positions was what council told staff they wanted.
“That’s where the dollars are being spent,” Morton said, adding that finance staff can do whatever the council instructs, though failing to address the issues only amounts to “kicking the can down the road.”
The conversation continued but, in the end, two on the council opposed any tax increase while two others were willing to vote for it. That was how the meeting ended, with no consensus on the direction finance staff should take to arrive at a budget all council members could support on July 17.
It is noteworthy that Fayetteville in 2008 had 163 staff positions. By early 2013 that number had been reduced to 115. Those dramatic reductions, along with wage freezes and other attempts to control spending were the suggestions made by Robinson and Walls in 2007 when they essentially predicted the recession that was later acknowledged by local, state and federal governments and economists.
It is also of note that Fayetteville has not raised the millage rate in more than two decades.
The council will meet on July 17 and, perhaps, adopt some form of the budget.